Leong Sze Hian / Columnist
The Ministry of Manpower has published a 74-page press release detailing significant progress in the welfare of low-wage workers. But a closer scrutiny of the report finds that the picture may not be so rosy. (Read the Straits Times report here.)
IS THE Ministry of Manpower (MOM) blowing its own trumpet?
While its press release claims that low-wage workers have made significant progress since 2006, they may in fact be presenting a distorted picture.
(Photo: A road sweeper keeping Singapore clean. Are these workers better off since 2006? Courtesy of Kirk Siang / Creative Commons)
The press release says that “the wages of the 20th percentile full-time employed resident increased from $1,200 a month in 2006 to $1,310 in 2008.”
However, after adjusting for inflation, $1,200 in 2006 would be equivalent to $1,304 in 2008.
This means that these low-wage workers received a wage increase of just $6 over 2 years, or just 0.25% per year.
So, while the headline of the press release proclaims: “Significant progress for low-wage workers since 2006”, are these workers really better off?
The ministry adds that “the number of residents earning $1,200 or less has fallen from 360,000 in 2006 to below 300,000 in 2008.” This is a little misleading as the benchmark of $1,200 is from 2006. The ministry should have used the 2008 benchmark instead, after adjusting for inflation.
The pertinent question should thus be: how many are earning less than $1,304, instead of how many are still earning less than $1,200.
The number of part-time workers in the workforce as a share of total employment increased from 3.2% in 1998 to 6.8% in 2008. There are currently 126,000 part-time workers, and their median monthly income has remained unchanged at $600. Is this proof that the number of low-wage workers (full-time and part-time) may have actually increased, rather than dwindled?
The press release also said:
“More people were working, especially from households living in smaller flat types. The monthly household income of those living in 3-room HDB flats or smaller also grew by over $300 from $1,910 to $2,220. Even after factoring for inflation, this translated to a 3.5% per annum increase in real terms”.
However, this increase in household income may be due to more people working per household rather than an actual increase in household income. What we need to know is the employed per household data – whether it has gone up – and the extent of it resulting in the 3.5% increase.
It is incredulous how the MOM chose to ignore inflation when talking about the rise in income of low-wage workers. As for the rise in household income, it seems like MOM is trying to paint a picture that workers are better off, even when the reality on the ground might be different.
Housing Grants
The press statement also highlighted that “more than 10,000 lower-income families received $144.3 million worth of Additional CPF Housing Grants (AHG)…”
This works out to an average AHG of $13,983 per family.
In view of the very large increase in HDB flat prices from 2006 to 2008, the AHG (or increase in the AHG) may have been lower than the flat’s price increase. For example, the HDB Resale Price Index increased by 37% from 101.8 in Q1 2006 to 139.4 in Q4 2008.
Is an AHG that is less than the flat’s price increase really a subsidy?
Childcare Financial Assistance
The press statement noted that the Kindergarten Financial Assistance Scheme (KiFAS) and the Centre-based Financial Assistance Scheme for Child Care (CFAC) were reviewed and enhanced annually. It provides $41.6 million from 2006 to 2008, for over 11,200 children per year, on average.
This works out to an average of about $103 per child per month. This might not be substantial enough – in light of the fact that the Today newspaper reported in July 2008 that “some 1,500 students attending the seven PAP Community Foundation (PCF) kindergartens in Woodlands will see their fees shoot up by 30 to 100 per cent from July.”
Inflation, it seems, might once again completely obliterate any supposed benefits Singaporeans have gained over the past two years.
Workfare
Why is it that the number of workers receiving Workfare declined from 362,000 in 2006 to 306,000 in 2007, and 297,000 in 2008, during a period of record job creation?
Why did a staggering 106,000 self-employed Singaporeans drop out of Workfare in 2007, after just 1 year?
Was it mainly because they had to contribute cash to their CPF, but receive their entire Workfare as a top-up to their Medisave account? (Note: The Resilence package now gives some workfare to them in cash.)
Home Ownership Plus Education (HOPE)
The press release stated that “an additional 1,200 families were approved for assistance under the HOPE scheme, bringing the total number of families approved on HOPE to about 1,700 at end-2008.”
After 5 years of the HOPE scheme, it is arguably not very successful by any measure, as only 1,700 out of 24,600 (presumably eligible families) have been approved.
This represents only about 7% of all eligible families. The average payout per HOPE family per year is quite a lot – $8,784. So, why are so few taking it up or being approved?
I think the problem may be that the bulk of the benefits is in the form of a housing grant of $50,000 disbursed in annual installments of $2,500 into the mother’s CPF account over 20 years, or until she reaches 45 years old. After that, a training grant of up to $10,000, and cash incentives of $6,000 – $20,000 will be given to help couples with family planning.
But while you may get $2,500 a year until age 45 to pay for a HDB flat, would you want to risk losing the flat plus face litigation if you can’t service the mortgage in the future? Would you really go for training when you are probably still struggling with work and free time?
Does it really make much difference for suffering families now?
Conclusions
As my final analysis, this 72-page press release may be of little meaning or consolation to lower-wage Singaporeans, because for them the reality is that they have been adversely affected by the downturn: many may have lost their jobs, had wages cuts, no bonus, shorter work week, compulsory leave, and so on.
The government’s threadbare social assistance schemes have not done much for them over the past three years, and are unlikely to serve them any better in the months ahead.
All the data that the government has released cannot conceal the reality that Singapore has become a much more unequal society under the government’s growth-at-costs approach. In thinking about how to restructure the Singapore economy, the government might want to rethink the premise of its economic strategy.
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Read also: “Average income of low-wage workers up by 9% over past two years” by Channel NewsAsia.
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Good analysis Sze Hian. The needy may not read these reports to properly refute it.
The point is that others who read it might be concerned enough to talk about it, speak up and/or do something for the less fortunate. Hopefully.
An enlightening piece. Thanks!
Government should reduce the pay packets for top earners
significantly to bring them in line with practices in other
countries. Those earning above a million dollars a year
can have these cut by half. Only when this happens, then
I would belief what they said they are doing to help the
needy.
Well done, Sze Hian. They are clearly saying something just to make themselves look good and as if they are doing something.
Numbers don’t lie….nice catch…. on inflation and CPF grant. It is so obvious.
Did the report mention about the number of hours these labours work to earn $1304?
What I do know is an average security guard, like my dad has to work more than 10 hours per day and only entitled 3 days of rest day per month and hence to earn approximately $1400 every month.
The smoke bombs being thrown at us by our elites is getting more and more pathetic.
Can’t enforce labour laws properly and yet claim they are protecting foreign workers …..throwing misleading figures at us now to make them look good….what else will they think of next?
The smoke bombs being thrown at us by our elites is getting more and more pathetic.
Can’t enforce labour laws properly and yet claim they are protecting foreign workers …..throwing misleading figures at us now to make them look good….what else will they think of next?
Sorry… forgot to say great post – can’t wait to read your next one!
Nice work by TOC. I take it that the 20 percentile income is $1310 in 2008? The inflation adjusted numbers should have been given. The fall in the number of earners below $1200 is not a worthwhile stat to mention.
However, its good to see the fall in the GINI coefficient, and I think that the fact that more members from low income families are working is a good thing.
P.S. CNA article says “Low-wage workers, who form 20 per cent of the workforce in Singapore…” This is a silly way to say it. I mean, they are DEFINED as the lowest 20%…..
Whether low wage workers better off or not, they are not the majority.
Even if their numbers are significant, some are very satisfied with the PAP.
Which explains why there are consistently 66% mandate for the PAP at every election!. This is the most important statistic to the PAP. And with a good design of GRCs, PAP get 50% walkovers and 98% seats too.
And for many more elections to come. This I am quite sure.
While it is good scrutinise govt statistic, we have to get beyond just raising suspicion about the reports and saying costs are increasing. This will only make the image of the Opposition stay very negative.
In my opinion, in addition to the questions, it is necessary to put forward what you think is the reason that low-wage workers is not able earn more, and how to solve the problem.
Besides, it would also good to anticipate common rebuttals and give some answers before they are asked. Like all policies, answers may not be perfect, but it shows that Opposition are aware of implementation issues. For example:
- If your solution is based on welfare, how much does each worker benefit and how much does it cost in total? Is that sustainable? What are the sentiments of the contributing taxpayers?
- Why do you think existing welfare is under-utilised. The article provides some guesses. It could be something worthwhile to investigate more.
- What do you think is a long-term solution to raise the pay of low-wage workers?
CNA: “Average income of low-wage workers up over past two years”
Yes, average working hours of these low-wage workers are also up!
If Gan Kim Yong said so, please don’t read his report. It is fake. I have been observing his gestures, his expressions and how he read out his opinions. Sincerity does not exist in him. I have decided to grab some other inspirational books to read and pass time instead of reading news from msm.
Its the same style and tactic by ST and PAP, simply paint a rosy picture and con SG citizens.
To “good article but can be improved”,
Why don’t you write an article for us to read????
When elites have to masquerade facts to promote agenda, you know the country is in trouble.
Else, why don’t they just tell you the actual performance.
To “good article but can be improved”,
How abt a minimum wage to begin with?
Great analysis, Sze Hian! Some of the points you make are so self-evident that it makes you wonder what kind of reporters they hire at SPH… Definitely not “our best and brightest”
1. Blatantly put, the only way for real wages (i.e. wage adjusted for inflation) to rise is to hold a job that commands higher value.
2. Social welfare helps people to tide through, not have a pay increase. It is unsustainable for welfare increase the real wage every year because this means the burden on social welfare has to increase yearly too.
As in business, there are two ways to survice in tough times: to increase revenue or cut cost. If revenue side though to increase, then should cut cost.
In the same vein, if govt cannot guarantee min wage or higher wages for Singaporeans, then it should reduce cost of living here. eg hdb price
Is there any law against worker exploitation in Spore? Can an employer pay $1 per hour to hourly paid workers?
Very apt of the government to come up with ‘reports’ like this…
They think they can still smoke the people with such lame news publications.
Keep up with all this lame-ness… your votes are sky-diving!
If the low wage worker did earn $1,300, it is okay. But I suspect that the statistics are not really revealing the correct situation. There must be many people that earned $800 or less, doing a full day job. Perhaps, they are excluded, in some way from the statistics? Maybe, they are counted as part time workers and not reflected here?
The best way to measure the progress (if any) is to look at the low wage workers two years ago, and find out if their wages today. We should be looking at the same cohort of people. Some have lost their jobs and earned nothing. Others have made progress and earned more. It should be based on the entire cohort or a representative sample of these people.
The MOM had the statistics. I hope that they are honest in making this calcuation and show the results. We need more honesty in presentation and use of statistics – to tell the true picture, and not to make the policy makers “look good”.
Actually, I think in this economic climate, the fact that the low income managed to keep pace with inflation is already a decent achievement.
However, I am very very skeptical about the total number of low income having actually decreased. As point out, with the huge increase in part-timers, what is the real figure?
Lastly, the average number of hours put in by the low income worker is also a concern. They might be low income, but do they not need work-life balance too?
Another ‘feel good’ data published.
I would not be surprise to hear the announcement of GE since Mas was caught, lower income group earning more than 2006, etc.
as usual, a good analysis……clears the smoke brought on by the MOM, yeah?
“In my opinion, in addition to the questions, it is necessary to put forward what you think is the reason that low-wage workers is not able earn more, and how to solve the problem.”
Do some u-turn on certain policies. Cap the inflow of similar foreign low-wage workers. supply < demand, “cost” will naturally go up. Do not think of cost per se (that is what pure capitalists may want you to believe, think it as a way to redistribute benefits from the haves of businesses back to have-not-so-much of low income earners.
The above will only work for firms who cannot / are not able relocate to another country but are deriving their businesses purely from local.
This wanyang Govt try to bullshit n mislead the citizens that the lower wage workers has improved their income, expect to get more votes from the ppl for the coming GE.
Correction…the lower wage workers hv improved their income
I GONNA print this out… GREAT stuff….
The PAP must be so far removed from the people to get this report printed out.. Are they trying to convince US, the people, that things are better or just trying to convince themselves, the government…. this is the typical “emperor syndrome” .. only told what will sound nice….
coz.. the people really don’t need any kind of convincing.. we are standing in HIGH water right up to our ears in the muck…
the people gets lower wages all in the name of competition… however, unfair that competition might be… this race to the bottom of the lowest wages is one that the people will continue to suffer and it will undercut our meritocratic principles… less resouces in time and $$$ will definitely not help families move up and out of poverty…
VOTE………. VOTE…………. VOTE…………. VOTE……………….. VOTE……………. VOTE…
I would like to see the improvement of the elite class viz a viz the lower class. If elite class income increase 400% and lower income increase only 0.25% as this article suggests then an increase of the lower class of such a small amount is really meaningless.
“Statistics are like a bikini. What they reveal is suggestive, but what they conceal is vital.”
- Aaron Levenstein
As LZH pointed out, did they take inflation, longer working hours into consideration?
What happens when subsidy is removed because we could no longer afford due to losses by TH & GIC?
17) anon11 on June 8th, 2009 12.57 am
“How abt a minimum wage to begin with?”
19) two things on June 8th, 2009 2.41 am
“Blatantly put, the only way for real wages (i.e. wage adjusted for inflation) to rise is to hold a job that commands higher value.”
I think a minimum wage policy works only if the worker is able to generate the value of the minimum wage, wise he just would not get the job, minimum wage law of not. It is much better to make sure that the economy is vibrant, to increase demand for jobs and thus drive wages up by the price mechanism. In the meantime, help the low wage worker upgrade his skills. In this aspect I think our govt has been working hard. I think the govt often appears unhelpful because it keeps a tight tab on the fundamental economic reality – productivity must keep up with wages. It is not a lack of empathy or concern.
i have no confidence at all in the MOM statistics esp previous minister who runs it. this one is no acception.
same trick……wanyang….wanyang……..
aiyoyo
make it simple la, let elites do work for 1month
($1200/month or $800/month),
after that see if there’s any feedback from them?
人间疾苦。。。
aiyoyo
20% of residents earn $1.2k or lower… That’s a frightening fact. $1.2k is not enough for a comfortable life. Heck, it’s barely enough to make ends meet, if you consider the fact that 20% of this $1.2k goes to CPF & you’re left with $960. 20% of the population earning this amount or less is unacceptable. Too many people struggles to make ends meet, making surviving a chorish challenge.
So, we just based on whatever is published as the ‘Statistics’?
I mean, how should i say this….hmmmm…..
did anyone get my drift?
if not reply and i shall clarify.
We are educated to think and analyse right?
Kue Tu-tu index:
price of the kue tu-tu at Pasar Malam:
used to be 3 for S$1 – $0.33 each about 3 years ago,
now the price is 5 for $2 – $0.40 each.
definitely income increase for the kue tu tu hawkers.
The govt ridiculous efforts to always use the media to misinform are so mind boggling.
If they can provide 1 billion dollars to help the needy then why are the poor always having to work two more jobs to make ends meet?
Why are so many HDB homes being repossessed lately?
Why are so many of our poor having to eat at temples for free meals?
A minimal wage system needs to be in place to see that our poor (those earn below $1200) will not continue to suffer as our living standard escalated.
I have stayed in CHina and Australia and found that our living standard thse past years have being rising faster than our wages.
In fact, having hear so much from the govt ‘s call for our people to take on any jobs that could pay meals on the table, we can guess that many middle income earners all got substantial pay cut working for employers who will continue to undercut one another in paying low salaries.
Foreigners also are willing to work for much lesser pay further squeezing the salaries of local ones.
This issue will seriously affect the votes of the govt in the forthcoming election.
I am thinking that perhaps the figures presented by the report might be true that there is a wage increase amongst the lower wage earners. The catch here is that these are workers who have managed to keep their jobs. However, what would be most telling, imho, would be the number of low-wage workers who have lost their jobs.
Take for example: Company A has been employing 3 workers are $1000 each per month. The company lets one of the employee go and keep the other two and increases their pay to $1300 each. the catch here is that these two workers must do the job left behind by the retrenced worker.
This is the situation we are facing now. It looks good on paper and the statistics looks even better – giving the false impression that our wages are increasing but not taking into the consideration the number of people out of job so that the rest can have these increases.
my daughter who is 24 yrs old and was retrenched lately. having to pay loan for education (degreed course), a poly graduate in chemical processing, got a job working as waitress though for temp., was paid $1,100.00 from 4.00 pm to 1.00 pm. this is what singaporean gets!
now u guy tell me, can you these MIW doing their work??
sorry, error.
it should be 4.00 pm till 1.00 in the morning…
Apart from inflation, we should not forget that GST rate has increasd. GST taxes the poor more than the rich.
Instead of coming up with effective solutions (besides the ineffective retraining scheme), the ruling elite chose to praise themselves!!
If life is so great in S’pore, why are so many people struggling to make ends meet. Even the middle class are finding life here increasingly difficult (the price of everything has shot up every year over the past 3 years)….not to mention the low wage earners.
45) lego on June 8th, 2009 2.02 pm
no you are wrong… GST is to help the poor… the rich pay more… our government say one….
I don’t believe the govt at all.
43) mike on June 8th, 2009 1.42 pm
I also looking for job.
A agent told me yesterday, e2i got waiter job. I asked i heard a lot of jobs created . Do you have jobs for executives (degree grads). He said only F&B and things like that. so, fyi, for your daughter to try. he said can try admin. I said oh, that is considered degree job.
Uptune the Downtune.
I had it.
#24 TKL: We need more honesty in presentation and use of statistics – to tell the true picture, and not to make the policy makers “look good”.
1. Without evidence, I won’t go so far to accuse the government for manipulating statistics. But I must say, they must have hope that statistics look good on themselves. On the other hand, equally guilty, are people who hope that the statistics reflect bad on the policers makers.
2. As I mentioned earlier, the only way to achieve an increase in real wages is by commanding a job of higher value. Aside from reporting wage increase, it’ll be revealing to have other statistics to measure how much has been done to help people acquire capability of holding a job of higher value, and what are the difficulties for more improvement.
We need people who can ask pertinent questions. People like Financials guru Mr Leong. The problem with singaporeans is they rely on some info given to them like being spoonfed. Open mouth, take in what is given. I prefer to think independently and question EVERYTHING. This is my right. eg. when someone says knee before me, do i do it? i tell him to fight spider. or when someone demands that you respect him, i say the same back to him plus “respect is earned not demanded. dun siah Sway like mr anyhow Say”.
Just think for 30 seconds, if he becomes the president, what pertinent questions could he ask?
regards
Pandora’s box – due to be wide open , in TIME.
“T-Rex used to think it is immortal and the lord of the jungle. It too is now extinct”